contango

(redirected from Forward premium)
Also found in: Financial.

con·tan·go

 (kən-tăng′gō)
n.
A state in which the price of a futures contract is higher than the eventual or expected spot price of the underlying commodity or security.

[Probably alteration of 19th-century stock-exchange jargon continuation, the carrying over of an account until the next designated date of settlement.]

contango

(kənˈtæŋɡəʊ)
n, pl -gos
1. (Stock Exchange) (formerly, on the London Stock Exchange) postponement of payment for and delivery of stock from one account day to the next
2. (Stock Exchange) Also called: carry-over or continuation the fee paid for such a postponement. Compare backwardation
vb, -goes, -going or -goed
(Stock Exchange) (tr) to arrange such a postponement of payment (for): my brokers will contango these shares.
[C19: apparently an arbitrary coinage based on continue]

contango


Past participle: contangoed
Gerund: contangoing

Imperative
contango
contango
Present
I contango
you contango
he/she/it contangoes
we contango
you contango
they contango
Preterite
I contangoed
you contangoed
he/she/it contangoed
we contangoed
you contangoed
they contangoed
Present Continuous
I am contangoing
you are contangoing
he/she/it is contangoing
we are contangoing
you are contangoing
they are contangoing
Present Perfect
I have contangoed
you have contangoed
he/she/it has contangoed
we have contangoed
you have contangoed
they have contangoed
Past Continuous
I was contangoing
you were contangoing
he/she/it was contangoing
we were contangoing
you were contangoing
they were contangoing
Past Perfect
I had contangoed
you had contangoed
he/she/it had contangoed
we had contangoed
you had contangoed
they had contangoed
Future
I will contango
you will contango
he/she/it will contango
we will contango
you will contango
they will contango
Future Perfect
I will have contangoed
you will have contangoed
he/she/it will have contangoed
we will have contangoed
you will have contangoed
they will have contangoed
Future Continuous
I will be contangoing
you will be contangoing
he/she/it will be contangoing
we will be contangoing
you will be contangoing
they will be contangoing
Present Perfect Continuous
I have been contangoing
you have been contangoing
he/she/it has been contangoing
we have been contangoing
you have been contangoing
they have been contangoing
Future Perfect Continuous
I will have been contangoing
you will have been contangoing
he/she/it will have been contangoing
we will have been contangoing
you will have been contangoing
they will have been contangoing
Past Perfect Continuous
I had been contangoing
you had been contangoing
he/she/it had been contangoing
we had been contangoing
you had been contangoing
they had been contangoing
Conditional
I would contango
you would contango
he/she/it would contango
we would contango
you would contango
they would contango
Past Conditional
I would have contangoed
you would have contangoed
he/she/it would have contangoed
we would have contangoed
you would have contangoed
they would have contangoed
Translations

contango

n (Fin) → Report m
References in periodicals archive ?
The benchmark six-month forward premium payable in November eased to 105-107 paise from 106.75-108.75 paise, while the far-forward May 2019 contract edged up to 255-257 paise from 254.50-256.50 paise.
He also showed that dependent of the interest rate regime, the volatility of the forward premium could be greater or less than the realized future spot variation in exchange rates.
A traditional open economy model cannot replicate the forward premium anomaly as it typically assumes that UIP holds.
But importers say that "buying" insurance, i.e., the forward premium to be paid, is too high.
However, if there exists a difference in interest rates between domestic and foreign money markets, the difference is reflected in the foreign exchange markets as a forward premium (i.e., F > S) or a forward discount (i.e., F < S).
The one main ingredient which is missing today to make these forward sales effective is that there is hardly any forward premium (contango) achievable with nearly next to no interest yield for periods out to ten years.
The model can rationalize the forward premium puzzle: a regression of the change in the exchange rate on the forward premium has a negative slope.
This translates into high forward premium for the low interest advanced economy currency, which increases with the duration of the forward contract via the covered interest parity condition.
The differential - the forward premium between the two currencies plus the return on the supposed deposit - is passed on to the investor as a 'yield' after adjusting for the bank's commission.
Forward premium anomaly refers to the empirical findings that changes in the spot exchange rate appear to be negatively correlated with the lagged forward premium or discount.
The relatively lower coupon rate offered on the Eurobond is expected, primarily due to the Euro trading at a forward premium relative to the US dollar.